Oracle Corp.'s (ORCL) made a bold gambit when it refused a licensing settlement with Google Inc. (GOOG) in lieu of a trial by jury. That gamble may yet prove an unwise decision. The world's largest smartphone operating system maker (Google) appears to be on the verge of a victory, after a jury was unconvinced that it committed actionable infringement of Oracle's Java intellectual property.

I. Google Scores a Win -- Mostly

The jury was in agreement that Google's Android infringed on Oracle's patented Java virtual machine, a technology that it acquired from Sun Microsystems in a major $7B USD 2010 acquisition. But the jury today said that an "impasse has been reached" regarding whether Google's infringement was negated by fair use.

The jury' answers aren't altogether perfect for Google. They do find that Google infringed on the general structure of Java and accuse it of lifting a specific algorithm (the rangeCheck method in two *TimSort.java classes/files). But they also absolved it of two other specific infringement accusations and absolve it from the documentation infringement claims.

This is a larger victory when you consider that Google already admitted to infringing the *TimSort.java classes. In other words, any files that Google argued it did not infringe on, the jury generally agreed.

The jurors also ruled that Google has cause to believe based on its interaction with Sun that it would not need a license. But, interestingly, the jurors admonish Google saying that was not sufficient to circumvent obtaining a license.

Oracle tried to make light of the bad news, trying to claim that the *TimSort.java infringements entitled it to the big damages it originally sought. Judge Alsup quickly dispelled this notion, tell Oracle's lawyers that while damages were likely, they had only prevailed on 1/3 specific source infringement claims and would thus likely see their requested damages shrink substantially.

The deadlocked jury concludes the copyright phase of the trial, which will then go before the expert justice, Judge Alsup, for the patent phase. The copyright phase saw many of the two companies' top executives, such as Oracle CEO Larry Ellison and Google CEO Larry Page.

Potentially a big reason for the jury's favorable ruling towards Google came from blockbuster witness Jonathan Schwartz, former CEO of Sun and big fan of the Android operating system. Mr. Schwartz gave Android the thumbs up back in the Sun era, in a high-profile blog which Oracle tried unsuccessfully to purge from the internet.

While the jury clearly felt that Mr. Schwartz did not have sufficient authority to authorize the use without a formal written agreement, it also upheld a key Google claim, that it reasonably contacted Sun seeking to ensure that unlicensed use was kosher. That jury confirmation may prove a key setback for Oracle in the damages phase as it paints Google as a sympathetic party who maybe goofed on failing to get a formal license, but who made a sincere effort to avoid misbehavior.

Judge Alsup will almost certainly use the jury's findings in his final ruling.

II. SSO Will Prove the Final Battle

(Note: The article previously misused the phrase "patent" when referring to Oracle's SSO IP claims, this is actually a copyright as readers pointed out. Thanks!)

The copyright phase isn't over -- not quite yet. Oracle still has one trick up its sleeve -- the SSO copyright.

Even as Google moves to declare the jury portion a mistrial (likely preventing both damages and retrial), Oracle is desperately preparing its May 10 filing to try to prove that the structure, sequence, and organization (SSO) of the Java application programming interface (API) is worthy of a creative copyright.

An SSO patent is kind of like taking non-copyrightables -- e.g. boards, shingles, concrete, and siding -- and attempting to copyright the compiled product on an architectural basis (say a copyright on a home design). The software engineering copyright methodology, which is used by super-corporations, remains a controversial tactic, as many argue that structure of code should not be copyrightable given the slippery slope precedent that creates.

The final battle will center around whether the structure of Java is patentable.
[Image Source: igorschwarzmann/Flickr]

Google will also present its case why the SSO copyright methodology is invalid on May 10. Both companies can counter each others' arguments on May 14.

The SSO debate is likely Oracle's last hurrah. Win and it still has a hope to secure the kind of infringement ruling that could allow it to ban Android handsets and force Google into a painful license agreement. Lose and Oracle may essentially lose it all, particularly given that the jury found Google's infringement to be minimal, absolving Google of many or Oracle's toughest accusations.

Google was hopeful of today's events, commenting:

We appreciate the jury's efforts, and know that fair use and infringement are two sides of the same coin. The core issue is whether the APIs here are copyrightable, and that's for the court to decide. We expect to prevail on this issue and Oracle's other claims.

Oracle released a statement hoping to bolster its case, as well:

Oracle, the nine million Java developers, and the entire Java community thank the jury for their verdict in this phase of the case. The overwhelming evidence demonstrated that Google knew it needed a license and that its unauthorized fork of Java in Android shattered Java's central write once run anywhere principle. Every major commercial enterprise -- except Google -- has a license for Java and maintains compatibility to run across all computing platforms.

The pair will conclude their testy tango in court later this summer, giving closure to one the tech industry's most bitter legal spats.